Watch the webinar
Today's webinar took the form of a conversation between the CBI’s own Chief UK Policy Director, Matthew Fell; the Interim Managing Director of Chiltern Railways, Mary Hewitt; and the Corporate Affairs Director at East Midlands Airport, Chris Hayton. As you may have guessed from those job titles, the main subject of discussion was transport and its importance to the restart, but we also touched on some other areas. Here are the key takeaways:
- The latest on the economic support packages
- The forthcoming guidance for reopening
- How railways are faring
- How airports are faring
- How businesses can help.
The latest on the economic support packages
The latest figures for the government’s main Coronavirus Business Interruption Loan Scheme (CBILS) were published this morning, and Matthew talked us through them. £5.5 billion has now been lent to businesses, and volumes have risen “about a third” since last week. The CBI hopes that these numbers will keep on rising significantly now that the Bounce Back loan scheme has been introduced for smaller businesses and smaller loans, freeing up the banks to devote more time to CBILS.
Speaking of the Bounce Back loan scheme, there have been encouraging numbers on that, too, after its launch on Monday: 69,000 loans were approved on just the first day. And about £8 billion has now been released to 800,000 employers through the Job Retention Scheme (JRS).
Matthew also emphasised another measure that has come up in most of our webinars this week: Trade Credit Insurance (TCI). This is, as Matthew said, “really critical to making sure that supply chains work effectively” – and yet the provision of TCI is drying up. “If it goes, it is one of those issues that can pull the rug out from under things, so it is important that we get it right.” The CBI is continuing its conversations with the Treasury and the Department for Business, Energy & Industrial Strategy (BEIS), to help find a solution.
The forthcoming guidance for reopening
Since last weekend, the CBI has spent a good deal of time with the government’s draft guidance for reopening businesses. Now we expect the finished guidance to be published this coming Sunday.
Actually, “finished” might not be quite the right word. As Matthew highlighted, the guidance will be a sort of “living document”, with more added and subtracted as businesses discover new best practices. It will, as has been explained in previous webinars, cover a selection of different work environments – including offices, factories and outdoors settings.
Matthew described several “positives” with the draft guidance that we’ve seen: it’s “very consistent with the current guidelines”; it’s “comprehensive and detailed”; and it contains “plenty of practical examples”.
But he did also mention some potential stumbling blocks. One is that businesses “need to be clear on the legal status” of the guidelines – are they safe from legal challenge if they follow all of the guidelines, or does that only apply to some? Another is “consistency across the UK” – will the guidelines be the same across all of the country, including the devolved administrations, in a way that “would be helpful”?
How railways are faring
“It all happened very quickly.” Mary began her remarks by describing how, as soon as the lockdown was announced, Chiltern Railways’ operations entirely changed. Peak-time services that used to deliver thousands of people to London are now “currently bringing in 300”. There is a “vastly reduced timetable”. And “we saw revenues drop off a cliff”.
However, this period has also enabled Chiltern Railways to introduce measures that will be crucial for the future, including social distancing on trains and in stations, as well as more monitoring of passengers and more announcements.
The company is looking to “build the timetable back up” throughout May – although “we still won’t go back to the full timetable”. At the moment, “we’re working [towards] approximately 25% capacity to maintain social distancing on the trains.” But, Mary added, “we can’t just think about the trains; we’re dealing with Victorian infrastructure that wasn’t made for social distancing.”
Chiltern Railways is eager to do all this work, though, said Mary – not least because, if people are to again start using the public transport that’s so crucial to the economic recovery, then they need to be assured that the public transport is safe. “In a way, it’s about getting that first journey right.”
How airports are faring
Chris explained that East Midlands Airport is “unique” in the country. By day, it’s a bustling passenger operation. By night, it turns into the UK’s “biggest and busiest air freight hub”. It’s a different story for each of these two operations.
“90% of passenger traffic vanished” on the weekend the lockdown was announced. “At the moment, there’s no passenger traffic at all.”
As for freight, there has actually been an “increase in the air traffic movement” coming through the airport. “We’re putting up 100 flights a day, with a whole range of essential supplies, from PPE to medicines.”
Overall, though, Chris said, “I don’t think it’s over-dramatic to say that this is the biggest challenge our industry has ever faced. In one weekend, the scale of the challenge eclipsed anything we’ve ever faced – from the Icelandic volcano to the financial crisis.”
Chris added that “it’s something we can come back from”, but the paths back are not easy. Consider the implications of social distancing: “Socially distanced queues to board a large aircraft would be half a kilometre long.” In fact, Chris said, social distancing “isn’t feasible” in air transport. East Midlands Airport is about to embark on trialling other measures, such as facemasks and temperature screening.
Unlike the railway industry, airports have also not received any specific government support. Chris said that he would “love” Boris Johnson to rectify this when he makes his statement on Sunday.
How business can help
Mary emphasised the importance of coordination between businesses and transport companies, as well as with the government, too. Chiltern Railways is looking at ways to leaven the increase in demand as businesses return to work – for example, “fares to incentivise people to come to work at different times in the day” – but businesses should also be thinking similarly.
This could involve promoting and making allowances for different forms of commuting, such as cycling and walking (Chiltern is introducing more bike racks in its trains this year). Or it could, in some cases, mean eschewing commuting altogether: as Mary said, “to everyone listening, I would encourage you that if you can work from home, please continue doing that”.
Matthew added his voice to this plea: “Please don’t just think about your own operations, but think about it in a system-wide context.” He also recommended that businesses engage with their employees over the questions raised by travel, and show “understanding” towards “individual situations” when deciding who should and shouldn’t be in the workplace.
Key questions we answered:
- To Matthew, the government has been working on the restart and safety guidance. What detail can you give us about that, so far?
- The CBI reviewed and fed into the government’s initial draft of their ‘working safely’ guidance documents over the weekend.
- The guidance is organised by ‘work type’ rather than traditional sectors. There will be seven guidance docs in total, covering:
- Working outdoors
- Hotels, bars and restaurants
- Factory, plant, warehouse
- In vehicles
- In other people’s homes
- In shops and branches
- In offices & contact centres
- After our initial review, there are several positives:
- The approach feels very consistent with the current guidelines for those businesses who have been open throughout the lockdown
- They feel reasonably detailed and comprehensive
- And there are plenty of practical examples and illustrations
- But there are also some areas to improve:
- It would be helpful to have an overarching statement that sets out the government’s guiding principles and also makes clear how the business guidance interacts with some critical enablers such as schools, transport, testing and PPE availability.
- More clarity on the legal status would help. What in here is “must do”? And if you follow best endeavours, does that protect you from legal challenge? There will be real concern around arbitration, so the clearer government can be, the more confidence firms will have.
- And it would be good to have more clarity on how the guidance applies across the UK, and how it sits with any variation in devolved nations and regions. What guidance for example should UK-wide firms adhere to?
- To Matthew, we know people are going to need to find safe ways to travel to and from work. What is the guidance saying on that?
- Businesses see transport as a key enabler to the restart both in the movement of people, but also in the movement of goods and delivery of services.
- However, there are clear concerns around:
- The health and safety of employees if they have no alternative to public transport
- Placing additional pressure on a transport system with reduced services
- Pressures on PPE provision, if it becomes mandatory for public transport
- And, building on that, we also know there are concerns in the transport industry about what social distancing will mean for them as they ramp up operations.
- These businesses need clarity from government about how the lockdown will be phased out and how it can support them with the restart.
- To Matthew, what have you been hearing about what went well during the lockdown?
- It’s important to acknowledge key services, such as railways, repatriation flights, and bus routes have operated well under extreme circumstances during the crisis.
- This includes measures to help those who’ve had to keep travelling, such as the suspension of parking charges for key workers in some areas, and TfL’s suspension of all road user charging schemes to help critical workers use their vehicles to get to work safely.
- The supply chain effort has also kept businesses like supermarkets open and fully functioning during this period
- In addition, many major cities around the world are adapting to accommodate more cycling and pedestrianisation.
- To Matthew, considering current advice for working/travelling safely, and how we think it will evolve over the coming weeks – what are some of the key issues for employers and employees to consider?
- Workers who can work from home should continue to do so where possible. We need to continue to minimise opportunities for the virus to spread and transport networks to be overloaded.
- Obviously, not all workers can work remotely, such as those working in factories, and people will need to travel to work, many relying on public transport.
- Recent estimates found transport networks will need to be vastly reduced services post-lockdown – potentially impeding workers’ ability to travel. So, employers will need to consider this as plan for restart, adapting, to what is likely to be a continued period of transport disruption.
- Possible steps include:
- Staggering shifts to ease the rush hour burden
- Conducting an assessment of workers’ commutes to understand how they may be impacted by reduced services.
- Communicating with staff around alternative transport options e.g. cycling
- Employers must be mindful of the heightened concern many workers will have about returning to work – travelling on public transport could exacerbate this if they do not feel safe.
- How can networks operate safely and sustainably when social distancing means capacity is greatly reduced? For example, how can social distancing on commuter services, as well as wider travel options be enforced.
- Above all, it emphasises the value of mobility and the importance of transport connectivity to the economy. We’ve seen behaviour can change rapidly, and business must play a role in shaping the transport infrastructure of the future.
- To Mary, what effect has the lockdown had on Chiltern Railways so far?
- We saw revenues drop off a cliff immediately.
- We also had over 6,000 requests for season ticket refunds.
- We would normally bring 15,000 to London during the morning peak, but we are currently at 300.
- We are making extra announcements on our train to encourage social distancing. We are also introducing extra stops so that key workers can get to work
- We opened up extra mess rooms, introduced more hand sanitisers and PPE. All this is geared to protect our employees.
- To Mary, how is Chiltern Railways preparing for the return to work?
- Staff shielding is being implemented so we don’t anticipate an immediate return to normal.
- We are looking at building our timetable back up while maintaining social distancing on the trains. This will be a challenge.
- We anticipate we will have to operate at 25% capacity to maintain social distancing.
- We operate with Victorian infrastructure not designed for social distancing. So, we have to risk-assess every area to ensure we can maintain social distancing.
- There needs to be consistent and coordinated messaging from government and businesses to promote social distancing and safety. We are looking at how you may be able to incentivise people to travel at different times of the day.
- Where people can work from home, I am asking organisations listening to this call to encourage that. We need to gradually build that up.
- From a congestion and air quality perspective, people migrating in large numbers to car-usage would be a bad outcome.
- To Chris, what has been the impact of lockdown on East Midlands Airport?
- From a passenger perspective, over one weekend we saw 90% of our passenger traffic vanish, and we are currently operating with no passengers coming through our airports.
- Like transport, we are also planning how to get people back onto airplanes.
- We do not think social distancing is feasible in our industry. A socially distanced queue to board people onto an aircraft would be approximately half a kilometre long. The infrastructure to support that doesn’t exist.
- It is vital we get clear government guidance on how to make this work.
- We are looking at various technological solutions to keep people safe, such as temperature screening and introducing as many contactless procedures for a passenger’s journey.
- The airlines will decide on reducing their seats, such as taking out the middle seat. However, reducing seats would render most flights unviable from an operating perspective, particularly when you have had an extended period of no traffic.
- Regarding freight, we saw in the three weeks after lockdown, an increase in our traffic numbers of around 10% growth every day. We are running approximately 100 cargo flights, predominantly carrying PPE and other safety equipment. This is helping businesses in the UK export to global markets and helping the international medical effort.
- So, we are becoming an express hub for logistics and freight during this lockdown.
- Heathrow has seen a 97% reduction in its passenger flights.
- In one weekend, this has become the biggest challenge the aviation industry has ever faced, eclipsing previous challenges such as the Icelandic volcano eruption. It is a challenge we can come back from, but it will take a consistent collective effort between countries, airlines, regulators, and airports.
- To Mary and Chris, if transport has to enforce social distancing, what level of economic support will you need to get through the period until we have a vaccine?
- At the outset of this crisis, the DfT put most of the railway industry on emergency contracts to protect the companies.
- Railway has a very high fixed cost rate so support will be needed.
- We measure our passengers in three ways: commuter, leisure, and business. Of the commuter and business markets, I do not think we will ever get back to the method of travel we had before.
- Working patterns will have fundamentally changed as a result of this crisis.
- Regarding the aviation industry, we have not seen significant government support schemes yet. We are taking advantage of the JRS, but we will need more measures, such as rates relief.
- We don’t see social distancing as a feasible option so we need government to work with us otherwise there will definitely need to be a support package.
- To Mary, do you think some sort of face covering or protection will be part of the new normal?
- Scotland has already done this as have parts of Germany, where it is now mandatory to wear face coverings on public transport.
- Public transport is key to the economy. So, public perception is essential.
- If the way to get them back is to make people feel safe, then that must be the right answer.
- To Chris and Mary, what would you like to hear from the PM during his address this Sunday?
- For aviation, we don’t want to see a sudden release of all the current measures. A phased exit from the lockdown and the JRS to ensure a smooth transition out of this is what we are looking for. We would also like a support package for airports.
- For trains, if we saw a sudden lifting on the lockdown and saw a sudden surge of public transport usage, that would be a disaster. So, a phased return is essential.